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#ICO, wanted to write a myth, but became a black bull

2017-2018 can be called the year of ICO. During this period of time, various cryptocurrencies and white papers have sprung up like mushrooms after rain. Investors don’t even need to understand the company’s situation, and they can earn dozens or even hundreds of times of income by investing with their eyes closed. Among them, the most successful Ethereum ICO myth has been continuously spread through the online community, which once made ICO a shortcut to life counterattack like winning the lottery. The sales price of Ethereum was only US$0.311 at the time of the ICO in September 2014, but as of May 15 this year, the sales price has risen to around US$198. In other words, if you bought 1 million won of ether at that time, even if you didn't sell it in time for the peak period in late 2017, you can still earn a difference of 6.36 billion won now. Chung Woo-hyun, co-organizer of the Ethereum MEETUP in Seoul and representative of Atomrigs Consulting, said, “The biggest failure in my life is not participating in the Ethereum ICO.”

However, while a very small number of projects write myths, most projects have become tragic black cows. Here are some typical examples of failed projects.

1. ICO was a bull market, and cryptocurrency listing turned into a bear market: Whether it is now or at that time, some projects bubbles have completely burst when investors are waiting for listing. Many people finally saw the true face of the project after the bubble completely burst, regretting why they spent a lot of money to buy such a miserable cryptocurrency project, and how the market price fell to such an extent. However, investment is one's own decision, and who can blame it?

2. Listed after ICO, the timing of exit depends on IQ: Some projects are listed directly after ICO, and the price once rose to several times that of ICO. Seeing such a situation, many people will mistakenly think that these projects have a bright future, and believe (mistakenly) that the projects will rise further, and then they will become miserable successors (*this is the case for the author, the author said to himself, if you want to write To produce an immortal masterpiece like "NEXT MONEY", you must directly experience an ICO. After the purchased project was launched, the price rose sharply, so I continued to hold it, thinking that it would continue to rise, but everything came to naught. I can’t even remember the login name of the exchange, but I don’t think it’s a pity, this investment is really lost).

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#SEC is asking for a refund of investment money, will investors really get their money back?

Telegram does not fall into any of the above categories. This incident became an "example". In this incident, a new subject intervened: the SEC. Its attitude towards ICO is very clear: no matter what other circumstances are, as long as tokens have the nature of securities, they should be carried out in accordance with the procedures stipulated in the securities law. Why must ICO be passed through an unpermitted method? In other words, since it is a security, it should raise funds through the IPO (Initial Public Offering) process. At present, the SEC is conducting a concentrated investigation on whether various projects are subject to securities laws. If the investigation finds that the tokens are of the same nature as securities, the project in question will be deemed a “sale of unregistered securities” and be required to refund investors. If you refuse to implement the SEC's executive order, you will face criminal penalties.

The SEC previously applied to the court to suspend TON and ordered Telegram to stop issuing its own token "GRAM", which was supported by the court. After the court made a judgment, Telegram announced the postponement of the release of TON last month, and offered two compensation plans to investors: one is to immediately return 72% of the investor’s investment amount, and the other is to invest in TON within one year of its launch. 110% of the investment amount will be returned. However, Telegram issued another announcement stating that investors in the United States cannot choose the second option. Because the SEC is an agency that protects American investors, TON that has not gone through the IPO process is an illegal project, and the situation will not change whether it is now or a year later. In other words, in the face of the SEC's measures, Telegram, which knows that it has no hope of continuing to promote the project, has given up on TON.

There is no specific content related to the return of investors’ investment amounts. Judging from the reports released by foreign media, many investors plan to file lawsuits against Telegram and Durov. Some even demanded compensation for Telegram shares, not just a refund of the investment amount.

JOIND Koran reporter neoran@joongang.co.kr

JOIND Koran reporter neoran@joongang.co.kr